US construction spending flat
By Helen Wright02 November 2011
Construction spending in the US was flat month-on-month in September, at US$ 787 billion - just +0.2% above the August figure.
Private construction increased +0.6%, including a +0.9% increase in residential output and a +0.3% increase in non-residential spending. Offsetting this, public construction fell -0.6%.
Year-on-year, construction spending fell -1.3% - a decline led by a -9.2% drop in overall public spending in September this year, compared to the same point in 2010. Offsetting this, total private construction spending rose +3.9% year-on-year.
Patrick Newport, US economist at IHS Global Insight, highlighted the fact that private non-residential construction was up nearly +12% since bottoming out in January.
"The anecdotal evidence is that much of the recent growth comes from companies improving and retrofitting existing facilities, not new projects," Mr Newport said, warning, "The recent upsurge could therefore turn around quickly should the economy falter. Indeed, the gains over the past three months have been paltry, and, with architectural billings declining, non-residential construction is probably in for some rough times soon."
Meanwhile, Mr Newport pointed out that despite the slight fall in overall public construction in September, infrastructure spending had actually increased for the second month in a row.
However, this was "not enough to call a turning point", according to Mr Newport, who said, "With state and local governments still facing budget cuts, public construction is also in for more rough times."